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Watch this trucking play as industrial stocks gain momentum

One trucking play to watch as industrial stocks gain momentum

It could be time to turn to trucking.

As industrial stocks slowly pick up steam, up 6% since Monday and over 4% in the last month, they present an attractive alternative to this year's soaring technology trade, founder Todd Gordon told CNBC's "Trading Nation" on Thursday.

"On a month-over-month basis, on a sector rotation model that we follow, the industrials are actually in first place," Gordon said. "Over the last couple weeks, trucking has taken a little bit of a backseat, but it's certainly going to rotate back into favor here."

Gordon's pick was Old Dominion Freight Line, a trucking stock up almost 63% year to date. The company's latest earnings report fell in line with revenue expectations but beat on earnings per share, making $1.25 a share versus the $1.07 expected.

Lately, the stock and the trucking industry overall have undergone some consolidation, Gordon said, pointing to Old Dominion Freight Line's chart.

"We're trying to get up through about 210. I'm bullish on that," he said. "I like this little bit of consolidation before the next leg higher."

Gordon did have some reservations about using options to trade the name.

"I'm a little hesitant to put an option trade on because it's not a high-flying, instant-response, high-beta technology or consumer discretionary or communications stock," he said.

One way traders could play it would be to buy longer-term options expiring toward the end of the year — Gordon chose the Dec. 18 expiration — in a relatively small range. Gordon opted for buying the $210-strike calls and selling $220-strike calls for a $10 spread that cost him $3.50 at the time of the trade.

"I will be looking to add the stock to my dividend portfolio. It only pays about .75%. It's not a very high dividend payer, but what's interesting for me is Old Dominion's growth rate is expected to accelerate," he said.

"Analysts have it growing revenues by 12% next year, which is faster than what they've done in the past at about 8.4% over the last five years. And if you compare that to other trucking companies within this industry, they're only expected to grow about 9%," he said. "So, you have a combination here of good technicals — trying to break up through that 210 — with expected revenue growth that should outpace within the industry."

Old Dominion Freight Line shares rose nearly 3% in early Friday trading to $206.17.